The Bank for International Settlements (BIS), together with leading European central banks, has successfully completed testing of a new technology that allows for the synchronization of currency transactions between different payment systems. About this informs Finextra.
The Bank of England, the Bank of France, the Bank of Italy, the German Federal Bank and the European Central Bank participated in the study. The goal of the Meridian FX project was to synchronize settlements for currency transactions.
The technology ensures that the transfer of one part of the transaction (for example, the purchase of a currency) occurs only at the same time as the second part of the transaction (the sale of another currency). A key role in the system is played by the “synchronization operator” – a technologically neutral interface designed to coordinate the simultaneous exchange of assets between payment systems.
The project combined a synthetic version of the British RTGS system with three experimental platforms of the system based on distributed ledger technology: DL3S (developed by the Bank of France), TIPS Hash-Link (developed by the Bank of Italy) and Trigger Solution (developed by the German Federal Bank).
The results of the study proved that synchronization is possible regardless of the type of assets, the transaction fund or the technology of the registry, which indicates the potential possibilities of its application in other markets. According to BIS, the findings will be taken into account in the work programs of the central banks that participated in the project.
We will remind that in January, the Central Bank of Sweden (Riksbank) invited Swedish banks to join the development of a system of instant cross-border payments in the EU and beyond — Target Instant Payment Settlement (TIPS). Banks had the opportunity to participate in the discussion of service design and its testing.
